IndiGo Approves Unsecured Loan Of $43 Million To Subsidiary
InterGlobe Aviation Ltd. approved on Thursday a grant of unsecured loan of $43 million to subsidiary InterGlobe Aviation Financial Services IFSC Pvt., according to an exchange filing on Thursday.
The transaction is conducted on an arm's length basis, adhering to section 186 of the Companies Act, 2013, it said.
The IndiGo parent firm's investment comes at a time when the board of directors of the airline approved the setting up of its financial services arms with a primary investment of Rs 30 crore.
The financial arm will be situated in the Special Economic Zone at Gujarat International Finance Tec-City. Also, the board of IndiGo agreed to issue corporate guarantees worth up to $996 million to ensure the payment obligations of the aforesaid wholly owned subsidiary.
IndiGo reported a loss for the first time in two years for the three months ended September. The carrier posted a loss of Rs 987 crore for the July-September period, compared to a profit of Rs 189 crore in the same period last year.
Despite the loss, the low-cost airline's revenue for the quarter increased by 14%, reaching Rs 16,970 crore, up from Rs 14,944 crore in the corresponding quarter of the previous fiscal.
Share price of Indigo closed at Rs 4,434.05 per share on the National Stock Exchange, reflecting a rise of 1%. In contrast, the benchmark Nifty fell 1.02%. Over the past 12 months, the stock has increased by 48.56%, and it has fallen 49.44% year-to-date.
Out of 22 analysts monitoring the company, 16 have a 'buy' rating on the stock, three maintain a 'buying' rating and three recommend a 'sell' rating for the stock according to Bloomberg data. The average 12-month analysts' price targets from analysts suggest a potential upside of 7.6%.
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